My Favorite Description To Date of the Problems and Appeal of Trump
Scott Alexander has a great article on the problems with Trump's approach to economics. I want to begin, though, with an analogy he uses at the end because it is the best single framework I have seen about understanding Trump's appeal:
Suppose you’re a hypercompetent billionaire in a decaying city, and you want to do something about the crime problem. What’s your best option? Maybe you could to donate money to law-enforcement, or after-school programs for at-risk teens, or urban renewal. Or you could urge your company full of engineering geniuses to invent new police tactics and better security systems. Or you could use your influence as a beloved celebrity to petition the government to pass laws which improve efficiency of the justice system.
Bruce Wayne decided to dress up in a bat costume and personally punch criminals. And we love him for it.
I worry that Trump’s plan for his administration is to dress up in a President costume and personally punch people we don’t like, while leaving policy to rot. And I worry it’s going to work.
Basically, Trump is acting like a small state governor, focusing his economic efforts on getting the Apple factory to come to town
So based on these two strategies, we are in for four years of sham Trump victories which look really convincing on a first glance. Every couple of weeks, until it gets boring, another company is going to say Trump convinced them to keep jobs in the United States. The total number of jobs saved this way will never be more than a tiny fraction of the jobs that could be saved by (eg) good economic policy, but nobody knows anything about economic policy and Trump will make sure everybody hears about Ford keeping jobs in the US. Every one of these victories will actively make the world worse, in the sense that these big companies will get taxpayer subsidies or favors they can call in later to distort government priorities, but nobody’s going to notice these either.
It seems appropriate to end this with a bit of Bastiat:
In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.
kidmugsy:
Start with a sense of proportion. Although O has been a bad president, there's every chance that McCain would have been worse. Though Trump may become a bad president, it's almost certain that Hillary would have been worse.
Or take the gloomy view; Trump will be assassinated by the Clintonistas before too long anyway and therefore his supposed policies won't matter in the least.
January 13, 2017, 9:26 amAugust Hurtel:
I don't think he will be satisfied with four years of fake. He has is own internal standard. We may or may not like his standard, but we can be relatively sure he will continue to try things until he either achieves what he whatever it is he thinks 'Make America Great Again' means, or he runs out of time. Remember, he already has most of what normal politicians get into politics to get. He got into politics for entirely different reasons. If he tries something, and it doesn't work, he is likely change it and try something else. He does this all the time- certainly changed things up in business and in his campaign.
January 13, 2017, 10:26 amIke Evans:
This is why I ultimately wanted Hillary to lose ever-so slightly less than I wanted Trump to lose. I'd rather have a out-n-out liberal as our president that has zero claim to the intellectual brand of conservatism than a pseudo-liberal who is now essentially the voice of conservatism.
January 13, 2017, 10:36 amThinker:
Trump seems to be using the "set an example" strategy for policy and action. This approach is actually less invasive than micromanagement bureaucracy we have all come to know and "love". As a businessman, he recognizes that platitudes and appeals only go so far and then a leader has to clearly show "this is what I want and this is what I mean." Now, I'm not sure that approach will be entirely successful because navigating Washington DC is like driving through a tar pit. But a few clear examples to large corporations have already yielded the desired "oh, shit, okay" responses from several others. Whether or not it will work with all of the other areas he has targeted remains to be seen.
January 13, 2017, 11:02 amjoe:
I am not so worried about Trumps lack of economic intellectual capacity
1) there are three branches of government, not one, and since congress makes the law, the executives branch's ability to screw things up is therefore somewhat limited
2) he has surrounded himself with reasonably compentent people, who likely arent going to be yes men and therefore arent likely to screw things up.
Yes the face of the government will be baffoon, with competent people running the show behind the scenes.
January 13, 2017, 11:14 amjoe:
"Although O has been a bad president, there's every chance that McCain would have been worse. Though Trump may become a bad president, it's almost certain that Hillary would have been worse."
In 2008 - I voted for Hillary in the primary under the theory that A) the democrat nominee was going to beat any Rep nominee, B) hillary was going to be less bad than obama and C) hillary would have far fewer coattails down ballot
January 13, 2017, 11:18 ambillyjoerob:
Obama was the ultimate time server. It was enough that he got another line on his resume, he didn't care that much about doing something. Trump is hyperactive. He can't stop working. So I don't think he'll be satisfied not doing anything. The problem is that he may try to do too much too fast, like Schwarzenegger, and then decide he was really a liberal all along and side with the Democrats to get his bills passed.
January 13, 2017, 2:19 pmtex:
People may be misunderstand Trump's methods. Trump didn't write an Econ book, he wrote "The Art of the Deal" (I've not read it, but know some hagglers).
“China Trade is not fair” is Trump-speak, not Economist-speak. Different meanings. I suggest Trump-speak may be more horse trading:
“$20,000 for that broken down nag is nuts & I don't even want a horse, they're a damn nuisance, but I'll give ya $2,000 for it as a gift for a grandson I don't like much.”
Both sides want to trade, & they lie & exaggerate till final agreement when both think they done the best they can or one wears out & caves.
China has trade restrictions harming us & them to bolster industrialization. With an effective world monopoly on rare earths they restricted export & demanded foreign mfrs needing RE's open plants in China & export finished goods. Instead 2 plants outside China opened & China caved, removing RE export restrictions restoring low prices. 1 plant closed & the other is near death, so at great cost, we've now got cheap RE's again. Trump-speak may be, we're not going to waste $Billions on temporary competing plants to keep China in line, but directly attack China's unfair practices gov to gov so we all maximize our profits – and if Trump succeeds, the US & China will be better off.
Mexico restricts US bids on some gov work & places taxes on some (all?) of our goods going into Mex, etc with others.
To work, threats must be believable & sometimes exercised. Firing an artillery shell across a bow can cost over $100,000. As with the RE plants it can cost many $millions to win in 1 category. There are a lot of categories. Keeping some plants here can be (1) like a football coach needing some points on the board to gain momentum & (2) Firing across the bow: “We're serious & we'll do whatever it takes.”
If horse-trading, you can't even know what he says is what he's after. Balanced trade puts a BIG, scary number put on the table & a big relief when the real goal is “begrudgingly” presented.
January 13, 2017, 3:43 pmmarque2:
You are right. The deal isn't exactly fair, very one sided in favor of China, but what Trump is doing is setting up a position of power to start negotiating. Economists, at least North American economists are all in angst about this. They don't want fair trade, they like the system where we buy from China and don't care - and the come up with all sorts of excuses why that is OK.
Imagine though if Trump actual did negotiate true free trade, we would get much more benefit and no excuses. As for the Atlantic trade deal the Democrats are suddenly against,, all sorts.of constitutional violations were purposely put in, some even regarding gun rights (ostensibly for the safety of nations trying to trade) because once a treaty is ratified it becomes similar tongue Constitution. It was going to be an end run against all those conservative policies the Democrats just don't like.
January 13, 2017, 4:39 pmmarque2:
Interesting. I caucuses for Hillary in Iowa. The GOP has a boring straw poll, all the fun stuff you hear about in the Iowa caucus happens on the Dem side, and my wife wanted to go to the Dem one anyway. Cut to the short - second round of balloting, we could choose Obama, Hillary, or Edwards in our caucus, the other candidates didn't meet the threshold in the first vote. Of those three, which is best - dang if it wasn't Hillary.
January 13, 2017, 4:42 pmmarque2:
It is interesting that libertarians are OK with whatever the Democrats do, that is just Democrats, and yet demand perfection from GOP candidates. Trump has a pretty good set of positions, and many of his actions are misunderstood by the pedantic North American economists who come up with all sorts of excuses why job loss is good, deficits are just grand, etc.
Give it time see what happens.
January 13, 2017, 4:45 pmtex:
In general agreement except that I don't think our economists so strongly against Trump are against free Trade. I believe they would prefer it, but they live in fear of our opponents. If we try for a better deal our opponents, without regard to their own interests or ours, will make trade worse, i.e. don't suggest you might fight cuz they'll launch the first & ongoing strikes & we'll be worst off. Now, some of the pointy-heads just don't like Trump, especially those hobnobbing with the top of the Gov food chain. He is not refined like they are.
January 13, 2017, 8:28 pmJ_W_W:
Why this doesn't bother me too much to is that for so long I have watched American companies outsource or move away for the flimsiest of excuses. Sure they SAY they will save tons of money, but more often than not it doesn't pay off.
I watched as a Fortune 500 company I worked for laid off dozens of IT workers and outsourced their jobs to Indian companies. This was for a key project that was considered essential for the company. I left that company years ago. The project, scheduled to be completed in 2 years is still not done a full DECADE later.
The only thing outsourcing got this company was abysmal failure. But they sure thought they were saving tons of money....
January 14, 2017, 3:25 amJ_W_W:
I love the breathless reporting on CNN about how Trumps nominees don't completely agree with his every idea.
This is a good thing not a bad thing. But liberals committed to lockstep groupthink can't freaking understand it.
January 14, 2017, 3:28 amRay:
I don't like Trump's overtly boisterous populist and protectionist attitudes towards trade and the economy, but do I think it's significantly different than the winner-picking previous administrators have indulged in? Probably not. We'll just hear more anecdotes about it in the press because Trump is loud. Crony capitalism is alive and well...
I voted for Trump for four main reasons: the Supreme Court; the fact that a right leaning agenda is far more likely under Trump than under Hillary (especially climate!); the fact that presidents all end up being pretty similar -- Trump seems more likely to change things up, which isn't a bad thing; and to watch the left's heads explode.
As marque alludes to, libertarians are in the easy position of being able to criticize everyone as they've never really held power. I like many of their ideas, but I'm a pragmatist not an unrealistic puritan living in an ivory tower where the citizenry isn't governed by emotion.
January 14, 2017, 8:09 amZachriel:
Coyote: Trump is acting like a small state governor, focusing his economic efforts on getting the Apple factory to come to town
Sure. The Trump team is bragging about jobs, even when those jobs were part of plans made months or even years ago. The U.S. economy creates about 200,000 jobs per month. A few hundred jobs are a statistical blip.
In any case, it's the difference between transactions and relationships. The U.S. has built strong international relationships based on trust over generations. Trying to gain a temporary transactional advantage can undermine those long-term relationships.
January 14, 2017, 9:25 amtommy ex thom w ex tomw:
I refused to vote for Mrs C because she is a blatant, frequent and out-and-out liar.
Which foreign government would trust anything that she uttered? For how long? With what reassurances? She is 'undealable' with, if you have any desire for common ground in deal making. She can dance on the "reset" button for all I care as she has shown herself to be incapable of knowing the truth.
January 14, 2017, 9:54 amTrump was not on my 'desired' list, but as an alternative to the Chappaqua biddy, he must be a step up.
marque2:
The economists we have now pretend what we have now is free trade, and that anything done to change it would just be anathema to something or other. Point out that it is really China allowed to sell here, but we can't sell in China, and then all the excuses flow - that is OK because the money flows back anyway, the jobs lost are just creative destruction, etc.
Economists get paid, and grants from big companies that like the discount stuff we get from China. So they go along with the line about not changing anything. These companies are afraid that any attempt at opening up the Chinese market, could cause China to retaliate and stop selling good to us. Of course economists know little about negotiation, and don't realize that China depends on us just as much as we depend on them.
January 14, 2017, 1:00 pmtex:
There's a joke about economists I don't remember well, but along the lines of: “Ask 12 economists a question & you get 12 different answers.”
So you've seen some I haven't & I read only a few, so no argument except those I've paid attention to do know what free trade is & do prefer it.
You are right about companies, big & small, and the big have more influence, not wanting anything to jeopardize their low “cost of goods sold” but there are others here that want to sell stuff in China & are prohibited by Chinese regs.
For some recent years I've been worried about China beating us to death economically with them growing ever stronger & us weaker. So, I've been reading some about it. Just started so my opinions are premature, but I think China depends upon us more than we do them. Probably much more. It is my current understanding that China has not sufficiently let Capitalism & the market take over, but meddle, not a little too much, but way too much. They have enormous inefficiencies by supporting what are called State Owned Enterprises, which are draining resources, capital & money, from private development. For a long time China directly subsidized them which led to criticism so the Glorious Leaders announced the SOE's would be set free & must earn a profit. Apparently that was all PR because the subsidies were replaced by loans from state banks, loans that can never be paid back & must be greater & greater every year to cover the SOE losses which are turned into false profits by funny bookkeeping. A few years ago, a journalists said 70% of China's bank loans are non-performing. They MUST have our $'s from their exports.
January 14, 2017, 1:30 pmQ46:
Compared to what?
Whining about the outcome of Trump's policies is meaningless unless compared to what they replace or what otherwise would be.
So to what is Trump-to-come being compared?
Obama's stellar 8 years and his brilliantly incomprehensible Obamacare, keeping GM on life-support, massive subsidies to bankrupt 'green' scams, protective tariffs for steel, sugar, subsidies for alcohol productions, hundreds of billions spent on stimulus which didn't, bloated Government?
Or Hillary taking up where Obama left off and bettering it?
The fact is Trump's protectionist, interventionist, Government boating, central control of the economy is no different from previous Presidents or what Hillary's would have been.
The problem is not who is in charge but that the basic ideology, central control of the economy and empowerment of the State over the individual is now endemic in the Body Politic and those who rise up to rule over it, indeed expected by the Masses.
And central control of the economy and empowerment of the State over the individual is the root of Socialism.
January 15, 2017, 6:33 amThane_Eichenauer:
Could you point out two of Trump's good positions?
January 15, 2017, 7:10 amThane_Eichenauer:
A number of prior US presidents are fair examples of what the concept of "the executives branch's ability to screw things up is therefore somewhat limited" is invalid.
January 15, 2017, 7:11 amThane_Eichenauer:
I don't think Donald Trump is going to get torpedoed (or assassinated) by anybody. He appears to have more talent and skill than many are willing to give him credit. I don't trust any given Trump position but I still think that he has accomplished a lot so far in life and may will (cross my fingers) turn out fairly good.
January 15, 2017, 7:14 amJ K Brown:
"Or you could urge your company full of engineering geniuses to invent new police tactics and better security systems. "
There seems to be a new TV show or movie that will explore this theme coming on. I've not caught the name, but it appears to be a new Robocop, with benevolent billionaire taking over policing rather than evil corporation. But lots of drones and such.
January 15, 2017, 12:21 pmbannedforselfcensorship:
I think this prediction of Trump will be true, but will only be one aspect of his presidency. This will be the PR side. The side where he rails against big pharma, or sympathizes with low wage earners.
There will be a quiet side that gets policy done, maybe not even pushed by Trump.
Things like "one in, two out" for regulations. Roll back at EPA, etc. Tax reform.
Though, Trump may be more interested in these things than we know, because of his business experience.
January 16, 2017, 11:11 amRecovering libertarian:
You underestimate Trump. Soon we will see who is right.
January 17, 2017, 6:23 pm